No my last name is Dias, You've never watched the X-Files?

People have the right to form a militia, and if you don't agree there, they have the right to assembly and bear arms.

Well, as a vexillology hobbyist (the study of flags or flag like symbols), I can tell you that the island is between Georgia (FLAG )and North Carolina(FLAG). I would say a flag for and island off of the beautiful Carolina coast might look like this for the City at least... FLAG, I made it myself.

The island seems too small to be a whole state, can someone confirm that it is indeed not a state?

This isn't a state and is definitely not a country, at most a county which in the US (takes place in) does not have any electable officials other than Sheriff. However the City is another story, a council with a mayor is what they'll probably go for.

This is a simulation of sorts of life, but we can start anew and crack down on rogue cops.

*Becomes Agent Mulder*

This isn't a country, this is a county at most or a single municipality. And checkpoints? If this does indeed take place inside the US, checkpoints are against the Constitution, but you could set up sobriety checkpoints.

This seems to be more of county rather than a state or country, so if anything, it'll be at most a sheriff dept.